Adjust loans from security Mallya deposited in HC: Tribunal

Bengaluru: The Debt Recovery Tribunal on Tuesday suggested the State Bank of India (SBI) adjust the Rs.2,000 crore security beleaguered tycoon Vijay Mallya deposited in the Karnataka High Court earlier against loans his holding firm UBHL raised to fund his now defunct Kingfisher Airlines Ltd.

“Adjust loans Mallya owes you from Rs.2,000 crore United Breweries Holding Ltd (UBHL) deposited in the Karnataka High Court in cases related to his airline,” tribunal presiding officer Justice C.R. Benkanahalli told SBI counsel in the bank’s Rs.9,091 crore debt recovery case here.

SBI is the lead bank of a consortium of 17 state-run and private banks which filed in August 2013 a joint petition before the tribunal after Mallya, his holding firm and the grounded airline defaulted in repayments.

“My duty is to protect your money. I suggest you explore adjusting the amount Mallya deposited in the high court so that you can reduce the liabilities as well as the interest burden,” Benkanahalli said in an oral suggestion.

The suggestion is based on Mallya’s March 6 media statement that UBHL had deposited Rs.1,250 crore in the Karnataka High Court – Rs.600 crore in July 2013 and Rs.650 crore in early 2014.

“The deposits were mobilised by selling UBHL’s shares in United Spirits Ltd to British liquor major Diageo Plc in July 2013, he had said.

Mallya also claimed that the consortium of banks had recovered in cash Rs.1,244 crore from sale of shares he pledged as collateral for the loans.

“Thus, the aggregate cash recovery/security available is Rs.2,494 crore.”

Adjourning the hearing to June 13, the judged said he would decide on the 26 interlocutory applications filed by SBI and other defendants in the recovery case.